Chương 3 Nghị định 163/2006/NĐ-CP: Thực hiện giao dịch bảo đảm

Chapter III

EXECUTION OF SECURITY TRANSACTIONS

Section 1. PLEDGE OF ASSETS

Article 16.- Holding of pledged assets

After taking the transfer of the pledged asset, the pledgee shall directly hold that asset or authorize a third party to hold it. In case of authorizing a third party to hold the asset, the pledgee shall still be responsible before the pledgor for the performance of obligations specified in Article 332 of the Civil Code and other obligations as agreed with the pledgor.

Article 17.- Responsibilities of the pledgee in case the pledged asset is lost, damaged, deteriorated or devalued

1. In case the pledged asset is an object in danger of deterioration or devaluation, the pledgee currently holding that asset shall notify the pledgor of the danger and request the latter to give the handling methods within a given time limit. If past that time limit the pledgor fails to reply, the pledgee shall take necessary preventive measures. The pledgee may request the pledgor to pay reasonable expenses if the former is not at fault for the danger.

When the pledged asset is lost, damaged, deteriorated or devalued due to fault of the pledgee, the pledgee shall pay damages to the pledgor.

2. In case the pledged asset is an object held by a third party and in danger of loss, damage, deterioration or devaluation, the rights and obligations between the third party and the pledgee shall comply with the asset custody contract.

3. The provisions of Clauses 1 and 2 of this Article do not apply in case the pledged asset suffers natural wear.

Article 18.- Responsibilities of the pledgee in case of sale, exchange, donation, lease or lending of the pledged asset or use of the pledged asset to secure the performance of other obligations

1. When the pledgee sells, exchanges, donates, leases or lends the pledged asset or uses the pledged asset to secure the performance of other obligations in contravention of the provisions of Clause 2, Article 332 of the Civil Code, the pledgor may claim back that asset and request the pledgee to pay damages. The pledgor does not have the right to reclaim the asset in the following cases:

a/ The asset buyer, exchangee and donee may establish the ownership within the statute of limitations specified in Clause 1, Article 247 of the Civil Code;

b/ The buyer or exchangee of assets being movables is not required to register the asset ownership and considered a bona fide party according to the provisions of Article 257 of the Civil Code.

2. If the pledgor does not have the right to reclaim the asset from the asset buyer, exchangee or donee according to the provisions of Clause 1, this Article, the pledgee shall pay damages to the pledgor.

Article 19.- Rights of the pledgee in case of pledge of bills of lading, savings cards or valuable papers

1. In case of pledge of an ordered bill of lading or a bearer bill of lading (complete set of bills of lading) according to the provisions of Article 89 of the Maritime Code of Vietnam, the pledgee has the rights to the cargo stated in that bill of lading.

2. In case of pledge of a savings card, the pledgee may request the organization receiving savings deposits to freeze the savings deposit account of the pledgor.

3. In case of pledge of a valuable paper, the pledgee may request the issuer of that valuable paper or the Securities Depositary Center to guarantee the pledgee's right to supervise the asset value stated in that paper.

If the valuable paper issuer or the Securities Depositary Center breaches the commitment to guarantee the pledgee's supervision right, it shall pay damages equivalent to the decreased portion of the asset value stated in that paper, unless otherwise agreed upon by the parties.

Section 2. MORTGAGE OF ASSETS

Article 20.- Rights of the mortgagee in case the mortgagor sells, exchanges or donates the mortgaged asset

1. In case the mortgagor sells, exchanges or donates the mortgaged asset that is not a goods circulated in the production or business process without the consent of the mortgagee, the mortgagee may recover the mortgaged asset, except for the following cases:

a/ The asset purchase or exchange is conducted before the time of mortgage registration, and the buyer or the exchangee of the mortgaged asset is a bona fide party;

b/ For the buyer or the exchangee of a motorized vehicle which has been registered for mortgage, the content of the mortgage registration does not accurately describe the frame number and engine number of that motorized vehicle and the mortgaged asset buyer or exchangee is a bona fide party.

2. If the mortgagee does not exercise the right to recover the mortgaged asset, the proceeds, the right to claim payment or other assets obtained from the sale, purchase or exchange of the mortgaged asset will become the mortgaged asset in replacement of the sold or exchanged asset.

For a registered security transaction, the mortgagee may take initiative in requesting the registration of change of the security asset. The registration of change of the security asset in this case does not change the time of registration.

3. If the mortgagor sells or exchanges the mortgaged asset being a goods circulated in the production or business process within the scope of its production or business activities; sells or exchanges the mortgaged asset of other types with the consent of the mortgagee and in the cases specified at Points a and b, Clause 1 of this Article, the buyer or the exchangee may have the ownership over that asset.

Article 21.- Rights of the holding party in case of holding of assets currently used for mortgage

When the obligee holds the asset according to the provisions of Article 416 of the Civil Code and that asset is currently used for mortgage, the rights of the holding party are preferred over those of the mortgagee.

Article 22.- Mortgage of the right to claim debts

1. The debt claim holder may mortgage part or the whole of that claim, including also the future claim, without the consent of the debtor.

2. The debt claim mortgagee has the following rights and obligations:

a/ To request the debtor to pay the due debt, if the debtor fails to perform or improperly performs the debt payment obligation;

b/ To supply information on the mortgage of the debt claim, when so requested by the debtor.

3. The debtor has the following rights and obligations:

a/ To pay the debt to the mortgagee according to the provisions of Point a, Clause 2 of this Article;

b/ To request the mortgagee to supply information on the mortgage of the debt claim; if no information is supplied by the mortgagee, to refuse to pay the debt to the mortgagee.

4. When the debt claim is transferred according to the provisions of Article 309 of the Civil Code, the order of priority between the debt claim transferee and mortgagee is determined according to the time of registration of transfer and mortgage transactions at the competent security transaction registry.

Article 23.- Lease or lending of mortgaged assets

1. When the mortgagor leases or lends the mortgaged asset without notifying the lesser or the borrower of the current mortgage of that asset according to the provisions of Clause 5, Article 349 of the Civil Code, thus causing damage, it shall pay damages to the lessee or the borrower.

2. The contract on lease or lending of the mortgaged asset shall terminate when the mortgaged asset is disposed of for the obligation performance. The lessee or the borrower shall hand over the asset to the mortgagee for disposal, unless otherwise agreed upon by the mortgagee and the lessee or the borrower.

Article 24.- Mortgage of currently leased assets

In case of mortgage of currently leased assets, the mortgagor shall notify the mortgagee of the lease. If that asset is disposed of for the obligation performance, the lessee may continue leasing it until the expiration of the contracted lease term, unless otherwise agreed upon by the parties.

Article 25.- Responsibilities of the mortgagor or a third party holding the mortgaged asset

1. If the mortgaged asset is lost, damaged, deteriorated or devalued, the mortgagor shall promptly notify such to the mortgagee and repair, supplement or replace that asset with another asset of equivalent value or add or replace the mortgage with another security measure, unless otherwise agreed upon by the parties.

2. When the third party holding the mortgaged asset pays damages for the loss, deterioration or devaluation of the mortgaged asset according to the provisions of Clause 1, Article 352 of the Civil Code, the paid damages shall become the security asset.

3. The third party holding the mortgaged asset is not required to pay damages if the mortgaged asset suffers natural wear.

Article 26.- Supervision and inspection of mortgaged future assets

The mortgagor is obliged to create conditions for the mortgagee to exercise the right to supervise and inspect the process of asset formation. The supervision and inspection by the mortgagee must neither obstruct nor cause troubles for the formation of the asset.

Article 27.- Investment in mortgaged assets

1. The mortgagee must not restrict the investment by the mortgagor or a third party in the mortgaged asset to increase that asset's value.

2. When the mortgagor invests in the mortgaged asset and uses the asset portion increased thanks to investment to secure the performance of another obligation or when a third party invests in the mortgaged asset and takes up the mortgage of the very asset portion increased thanks to investment, the case shall be handled as follows:

a/ If the increased asset portion can be detached from the mortgaged asset without devaluing the mortgaged asset compared with its value before investment, the securees may detach asset portions they receive as security for disposal.

b/ If the asset portion increased thanks to investment cannot be detached from the mortgaged asset, that mortgaged asset shall be disposed of as a whole for the obligation performance. The order of payment priority between the co-securees is determined according to the time of registration.

Article 28.- Return of land use right certificates or asset ownership certificates to mortgage registration applicants

1. When it is agreed by the parties or permitted by law to use the land use rights or assets with ownership registration to secure the performance of many civil obligations, the mortgagee or a third party currently holding the land use right certificate or the asset ownership certificate shall return such certificate to the registration applicant for carrying out procedures for mortgage registration, unless the registration of security transaction is otherwise agreed upon by the co-securees.

2. Within five days after the completion of the security transaction registration, the registration applicant shall return the land use right certificate or the asset ownership certificate to the mortgagee or a third party entitled to hold such certificate, unless otherwise agreed upon by the parties.

Section 3. DEPOSITS OR ESCROW ACCOUNTS

Article 29.- Cases where deposits or advances are not clearly identified

When a contracting party transfers to the other party a sum of money, which is not clearly identified by the parties as a deposit or an advance, that sum of money shall be considered an advance.

Article 30.- Obligations of the depositor or the escrow account depositor

1. To pay to the deposit receiver or escrow account receiver reasonable expenses for preservation and maintenance of the deposited asset or the asset put in escrow account, unless otherwise agreed upon.

2. To carry out the registration of the ownership over the deposited asset or the asset put in escrow account for the deposit receiver or escrow account receiver, for assets of which the ownership must be registered as required by law, in case the ownership over that asset is transferred to the deposit or escrow account receiver as provided for by law or agreed upon.

Article 31.- Rights of the depositor or escrow account depositor

The depositor or escrow account depositor may request the deposit receiver or escrow account receiver to stop using the deposited asset or the asset put in the escrow account if the use of such asset may pose a danger of deterioration or devaluation.

Article 32.- Obligations of the deposit receiver or escrow account receiver

1. To preserve or maintain the deposited asset or the asset put in the escrow account; not to exploit or use that asset, unless otherwise agreed upon by the parties.

2. Not to establish any transaction on the deposited asset or the asset put in the escrow account, unless it is so agreed by the depositor or the escrow account depositor.

Article 33.- Rights of the deposit receiver or escrow account receiver

Unless otherwise agreed upon, the deposit receiver may own the deposited asset if the depositor refuses to enter into or perform the contract.

The escrow account receiver may own the asset put in the escrow account if the rented asset no longer exists for return to the escrow account receiver, unless otherwise agreed upon.

Section 4. COLLATERALS

Article 34.- Collateral assets

1. Collateral assets as specified in Clause 1, Article 360 of the Civil Code are put in frozen accounts at commercial banks to secure the performance of civil obligations.

2. Collateral assets and single or multiple collaterals at banks where collaterals are made shall be agreed upon by the parties or provided for by law.

Article 35.- Obligations of the bank where collateral is made

1. To pay at the request of the obligee entitled to bank payment, and pay damages within the value of the collateral asset, after subtracting bank service charge.

2. To return the remaining collateral asset to the depositor after subtracting bank service charge and the sum of money it has paid at the request of the obligee upon the termination of the collateral.

Article 36.- Rights of the bank where the collateral is made

1. To request the obligee entitled to bank payment and damages to strictly carry out procedures for getting payment and damages.

2. To enjoy the bank service charge.

Article 37.- Obligations of the collateral maker

1. To make the collateral at the bank designated or accepted by the obligee entitled to bank payment and damages.

2. To remit fully the collateral asset in strict compliance with the agreement with the obligee entitled to bank payment and damages.

3. To agree with the bank where the collateral is made on payment terms in strict compliance with the commitment with the obligee entitled to bank payment and damages.

Article 38.- Rights of the collateral maker

The collateral maker may request the bank where the collateral is made to return the collateral asset after subtracting the bank service charge and the sum of money paid at the request of the obligee entitled to bank payment and damages upon the termination of the collateral.

Article 39.- Obligations of the obligee entitled to bank payment and damages

The obligee entitled to bank payment or damages is obliged to strictly comply with procedures for requesting payment by the bank where the collateral is made.

Article 40.- Rights of the obligee entitled to bank payment and damages

The obligee entitled to bank payment and damages may request full and timely payment by the bank where the collateral is made.

Section 5. GUARANTEES

Article 41.- Grounds for the performance of guaranteed obligations

Grounds for the performance of guaranteed obligations are agreed upon by the parties or provided for by law, including the following cases:

1. When an obligation comes due but the guaranteed fails to perform or improperly performs that obligation toward the guarantee;

2. The guaranteed must fulfill the obligation toward the guarantee ahead of time due to its obligation breach but it fails to perform or improperly performs it;

3. The guaranteed is unable to perform its obligation in case it is agreed by the parties that the guarantor shall perform the guaranteed obligation only when the guaranteed is unable to perform that obligation;

4. Other grounds provided for by law.

Article 42.- Notice on the performance of guaranteed obligations

The guarantee shall notify the guarantor of the performance of guaranteed obligations when the grounds for performance of the guaranteed obligations specified in Article 41 of this Decree arise. If the guaranteed must fulfill the obligation ahead of time due to its obligation breach but fails to perform or improperly performs that obligation, the guarantee shall clearly state the reasons in the notice on premature performance of the obligation by the guaranteed.

Article 43.- Time limit for the performance of guaranteed obligations

The guarantor shall perform a guaranteed obligation within a time limit agreed upon by the parties. If there is no agreement, the guarantor shall perform the guaranteed obligation within a reasonable time limit after it is notified of the performance of the guaranteed obligation.

Article 44.- Security for the performance of guaranteed obligations and the guaranteed's obligation toward the guarantor

The parties may agree on the establishment of a security transaction to secure the performance of the guaranteed obligation and the guaranteed's obligation toward the guarantor according to the provisions of the Civil Code, this Decree and relevant legal documents.

Article 45.- The guarantor's right to request the refund

The guarantor shall notify the guaranteed of the completed performance of the guaranteed obligation. If no notice is made and the guaranteed continues performing the obligation toward the guarantee, the guarantor may not request the guaranteed to perform the obligation toward it. The guarantor may request the guaranteed to refund what the guaranteed has received from the guarantor.

Article 46.- Rights of the guaranteed

As soon as it notifies the guarantor according to the provisions of Article 42 of this Decree, the guaranteed has the following rights:

1. To request the court to apply provisional urgent measures to the guarantor's assets according to the provisions of the civil procedure law;

2. To request the person committing act of illegally obstructing the exercise of the guarantee's right to terminate that act.

Article 47.- Disposal of the guarantor's assets

In case of necessity to dispose of the guarantor's assets according to the provisions of Article 369 of the Civil Code, the parties shall agree on the assets to be disposed of, the disposal time, place and mode. If no agreement is reached, the guarantee may initiate a lawsuit at court.

Article 48.- Performance of the guaranteed obligation in case the guarantor is a bankrupt enterprise or an individual who is dead or declared dead by the court

1. If the guarantor is a bankrupt enterprise, the guarantee shall be settled as follows:

a/ When the guaranteed obligation arises, the guarantor shall perform that obligation. If the guarantor fails to fully pay within the guarantee scope, the guarantee may request the guaranteed to pay the deficit;

b/ When the guaranteed obligation has not yet arisen, the guaranteed must replace the guarantee with another security measure, unless otherwise agreed upon.

2. If the guarantor is an individual who is dead or declared dead by the court, the guarantee shall be settled as follows:

a/ If the guaranteed obligation must be performed by the guarantor itself as agreed upon or provided for by law, the guarantee terminates;

b/ If the guaranteed obligation is not performed by the guarantor itself, the guarantee does not terminate. The heir of the guarantor shall perform the guaranteed obligation for the guarantor according to the provisions of Article 637 of the Civil Code, except for case of disclaim of heritage according to the provisions of Article 642 of the Civil Code. The heir that has performed the obligation for the guarantor shall enjoy the guarantor's rights to the guaranteed.

Section 6. TRUST

Article 49.- Trust

1. Trust means a security provided by a grassroots socio-political organization with its prestige for a poor individual or household to borrow a sum of money from a credit institution for production, business or service activities.

2. Poor individuals or households secured with trust must be members of one of the socio-political organizations specified in Article 50 of this Decree.

3. The poverty line applies in each period according to law.

Article 50.- Socio-political organizations providing trust security

Grassroots units of the following socio-political organizations are trust security providers:

1. Vietnam Peasants' Association;

2. Vietnam Women's Union;

3. Vietnam Confederation of Labor;

4. Ho Chi Minh Communist Youth Union;

5. Vietnam War Veterans' Association;

6. Vietnam Fatherland Front.

Article 51.- Obligations of socio-political organizations

1. To certify at the request of credit institutions the conditions and circumstances of poor individuals or households borrowing capital from those credit institutions.

2. To take the initiative or closely coordinate with credit institutions in assisting, guiding and creating conditions for poor individuals or households to borrow capital; to supervise the use of borrowed capital for proper purposes and with efficiency; to urge the full and on-time repayment of loans to credit institutions.

Article 52.- Rights of socio-political organizations

Socio-political organizations may refuse to provide trust security if they deem that poor individuals or households are unable to use loans for production, business or service activities and to repay them to credit institutions.

Article 53.- Obligations of credit institutions

Credit institutions are obliged to coordinate with socio-political organizations providing trust security in providing and recovering loans.

Article 54.- Rights of credit institutions

Credit institutions may request socio-political organizations providing trust security to coordinate with them in inspecting the use of borrowed capital and urging the debt repayment.

Article 55.- Obligations of borrowers

1. To use borrowed capital for the committed proper purposes.

2. To create favorable conditions for credit institutions and socio-political organizations to inspect the use of borrowed capital.

3. To repay fully and on time loan principals and interests to credit institutions.